Contradictions in Paradise: When the Workers Become Bosses

I have written extensively about Mondragon on these pages with almost all of it in a favorable light. There is, however, another side of Mondragon. As a matter of survival, Mondragon’s co-operatives have ventured abroad to place factories outside of Basque Country. These plants are wholly owned by the co-ops, most notably, Fagor. The workers of these plants are not eligible for membership in Mondragon and do not receive any of the benefits of the Mondragon system. There seems little difference between the American management of local workers in US based internationals and Mondragon. They both are, in a sense, economic imperialism. In Mondragon’s case, it was a reaction to the pressures of globalization and designed to defend their jobs at home.

Mondragon’s leaders have always insisted that the workers in these plants receive better pay and benefits than other factory workers in the region. They also discuss long-term plans to eventually incorporate these plants into the Mondragon system as stand-alone co-operatives once they find a suitable means of educating the workers and developing a protocol for doing so without weakening the existing social cohesion of the Mondragon Co-operative.

One of The Workers’ Paradise commentators noticed some uproar in Poland last week and sent me word about labor actions taking place against Fagor. When I first did a search, all that I could find were some anarchist postings that decried Fagor Mastercook’s plant as a “workcamp”. That seemed a bit inflammatory given Poland’s history of work camps under Soviet and Nazi rule. Fortunately, I have other sources who pointed me to some mainstream media outlets.

It appears that since Fagor acquired the French company Brandt, they have been slowly moving production away from France to factories in Poland in order to take advantage of cheaper labor in the eastern European country. This caused some labor unrest by the French workers. However, it also caused an increase in production in Poland. Now the Polish workers, led by Solidarnosc among other labor unions, demand compensation including seniority increases for their increased labor.

If you use Google’s Translater, you can get the gist of the articles. Essentially, Fagor has fairly low pay, tries to use temp workers instead of permanent workers (and many of these temps were dismissed when the labor actions started) and has fought increased wages for quite a while despite a 10% increase in productivity by the workers.

Now the workers have begun an “Italian Strike” which in the United States is known as “Work to Rule”. For those unfamiliar with the term, “Work to Rule” means that the laborers follow every corporate policy as well as all federal and state (in the US) safety laws. The idea is that most corporations’ profit depend on workers taking short cuts and ignoring policy. A “Work to Rule” action can significantly reduce productivity without shutting the plant down.

A colleague of mine suggests that the board of the Fagor mastercook plant in Poland seems uneducated in the co-operative or in management. Most of the directors are either financial bean counters or in marketing. This web site gives a short bio of two of the directors (again, you will need the Google translator if you do not read Polish).It appears that the board of Fagor Mastercook in Poland consists of Polish managers. I have to admit quite a bit of ignorance on the organization of Mondragon’s foreign operations. The CEO and President of Fagor Mastercook in Poland (and apparently, if I read the articles correctly, France) is Polish.

In reading some of the comments on the articles there seems to be a real fear among some workers that Fagor will simply move these jobs to another country if the union doesn’t give in (one posts begs fellow Poles to not let these jobs go to Argentina). I think that the most important point of the articles is that this labor action and the news about the labor conditions and pay defeat the argument made by Mondragon regarding how they treat non-member foreign workers. It seems that they don’t offer the prevailing wage and use lax laws regarding temporary workers to undercut the power of labor unions and collective bargaining by workers.

I realize that Fagor has been fighting for its life. So called “White Appliances” are an incredibly mature industry, with little or no room for growth. The recession has made this durable goods even less of a likely purchase for most working class families. When I was in Mondragon, one of the managers with whom we spoke admitted that many saw Fagor’s time coming to an end. The purchase of Brandt was meant to forestall that time; however, the people at Headquarters recognized that they were only buying time. The trouble, of course, is that Fagor was the first co-op and its legacy has an incredible hold on the psyche of Mondragon.

The Polish struggle represents the dark underside of worker co-operation. Our movement can’t engage in the exploitation of workers even to protect other members of the co-operative or, worse, a nostalgic legacy. I don’t think that this means that Mondragon should simply accept worker demands; however, when the situation gets to the point of a work slow-down, work-to-rule, or all-out strike, it seems to me that a worker co-operative is no longer acting according to the principles of co-operatives or worker rights.

The Fagor Mastercook board needs to take a real assessment of who they are as an organization and find a way to settle this dispute that will create a true partnership with the Polish workers based on the best interests of both Mondragon and Poland’s community. Creating fear and loathing isn’t the method of building a better world. Fagor Mastercook’s board would do well to read the Mondragon publication Pensiamentos and learn the teachings of Don José Arizmenidaretta. How Fagor responds to this strike could have significant consequences especially in working with the US Steelworkers to open plants in the United States and Canada.

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-op in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University. He has served on the board of the US Federation of Worker Cooperatives and the Board of Governors for the Democracy at Work Network. He currently sits on the Co-op Circle and Mission Circle for Sociocracy for All. He teaches on worker co-operatives and democratic management in the summer at The Evergreen State College.

3 Responses to Contradictions in Paradise: When the Workers Become Bosses

It is very interesting to read your research into this Polish strike involving this Mondragon subsidiary. I
am a bit shocked despite myself. I had hoped in vain that Mondragon wasn´t that bad even though I have heard disparaging
comments about the lack of co-op governance in their subsidiaries abroad.
I recently read about the German economy which has been described as the most dynamic right now in the European Union.

Here´s a portion of an August, 2010 article:
“By paring unemployment benefits, easing rules for hiring and firing, and management and labor’s working together to keep a lid on wages, Germany ensured that it could again export its way to growth with competitive, nimble companies producing the cars and machine tools the world’s economies — emerging and developed alike — demanded. ” read more here: http://www.nytimes.com/2010/08/14/world/europe/14germany.html

The Aug article touches on some federal policies that have been helping companies there
manage any upsurges in unemployment conditions.

It seems to me that Germany´s success has some parallels with Mondragon´s, more so than the US´s. I´m glad to hear
if some workplaces have been left intact for AFL-CIO members, like ACIPCO, Herman Miller, and SAICs´
employee-owned workplaces. Nevertheless, Louis Uchitelle´s book, The Disposable American, gives the statistics that
Michael Moore has hinted at in his movies about corporate downsizing and relocation.

In this business of industrial manufacturing, I would think that the pressures from advertising and consumer
demand might be more susceptible to manipulation than agricultural commodities being worked with in terms of Fair Trade.
In fact, the existence of a third party certification for Fair Trade, and for other sustainability factors like
organic agriculture, forest stewardship, and marine stewardship, suggest the need for a certification in products to
tip the balance to some degree. The Fair Labor Association and other sweatshop monitoring represent a key opportunity in
this regard. That would provide a powerful distinction and psychological market factor to begin to limit the
voracious cycles and behaviors in the technological sector.

There used to be ads singing about “Look for the union label….” Long gone, and they need to be brought back,
perhaps with the Fair Labor Association in partnership with Fair Trade. Now there´s an
alternative vision Mondragon could begin to latch onto.